Student loans are meant to help college students and their parents afford the cost of a college education. But it’s natural to wonder if you can use the funds for other purposes,such as paying off credit card debt. It’s generallynot a good ideato use student loans to pay off credit card debt.
People also ask
Should you pay off your credit card or student loans first?
To answer this, consider the interest rate on your credit card and the interest rate on your student loan. Because credit card debt, by nature, is most likely the highest interest debt that you鈥檙e paying, McClary suggests paying that off first if you are someone who carries a balance on your card from month to month.
Are student loan repayment options better than credit cards?
Student loan repayment options are far more flexible than those available for credit cards. Lenders often have multiple repayment plans you can choose based on your ability to pay. For example, most lenders offer an income-based repayment plan that can fluctuate based on your income and expenses.
Why are student loan interest rates higher than credit card interest rates?
Credit card interest rates are typically higher than student loan interest rates which means this debt is more expensive.
Can student loan debt hurt you?
That’s not to say that student loan debt won’t ever hurt you. It is possible to have such a high amount of student loan debt that you cannot afford any additional loan obligations. However, lenders are a little more lenient with student loan debt than with credit card debt when it comes to approving you for major loans like a mortgage or car loan.